Conventional procurement is a tail dragger. It brings down the organization because it exists to satisfy needs verses seeking opportunities to secure unlimited value. Unlimited value is the secret of Unlocked Procurement. Unlocked Procurement recognizes the power within procurement as it realizes unlimited value from the supply base, the organization and customers.
Sounds simple, doesn’t it? Not necessarily true. You can’t secure unlimited value without the definition of value. Value equates to worth and importance. Value is something that is desired by the organization and in this case from procurement. Procurement value may be defined as any number of the following:
• Monetary – Savings, profitability, revenue, earnings per share
• Opportunistic - Growth, market share, brand awareness
• New Product – Time to market, respect of product, differentiator
• Paradigm Shift – New application of current model, conversion to new service or product with greater offering and less money
• Relationship – Customer, suppliers, employees
• Governance – Compliance, risk, CSR
However you define procurement’s value, its significance may be for only one moment in time; it might grow, sustain, diminish or even change its attributes. It is imperative procurement’s value is captured, from its baseline through its lifecycle, monitoring the progress and providing visibility for the organization, customers and suppliers to realize unlimited value.
How do you define and measure value in your organization? I would love to hear from you.
